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The San Diego County Grand Jury has found issues with the accounting methods of a special tax district aimed at promoting Chula Vista as a tourism destination.

The income is collected by the city and spent by the Chula Vista Chamber of Commerce after 22 hotel and motel owners agreed in 2009 to collect a 2.5 percent tax on room rates.

The Chula Vista Nature Center is one of the city's main attractions (U-T file)

The Grand Jury report to be released early Wednesday also raises questions about overlapping responsibility between the chamber and the special tax district, a situation the City Council corrected in March by establishing a separate board and annual audits.

"For the first two years, the Chamber Executive Committee also served as the TMD Board. This resulted in some blurring of responsibility and accountability, which was noticeable in spending, advertising and operational decisions," the report states.

The grand jury, a 19-member civil courts panel that reviews local government, also found the bulk of the funds were going to pay chamber staff. The report found that 72 percent of the $693,487 collected between July 2009 and June 30, 2011 was spent on staff expenses. The Watchdog highlighted many of the concerns in January.

The grand jury also highlighted advertisement choices of the organization.

"Most of the TMD marketing efforts to date have promoted spending locally in two local publications - The Star News and My Hometown Chula Vista. The Grand Jury does not believe these advertisements are narrowly tailored to increase lodging occupancy."

The report notes that since the grand jury began its investigation, the city has taken several steps to remedy the concerns raised, such as establishing a formalized agreement between the city and the district; implementing an annual audit and establishing a separate entity to oversee the funds.

“We’ve worked with the city and grand jury to ensure that proper controls are being put in place, including the agreement with the city,” Chamber CEO Lisa Cohen said in response to the report. “We will continue to file the necessary annual reports on our activities, which will now include audits. “We are very focused on driving room nights with the TMD dollars, our staff works diligently to implement marketing programs which put heads in beds.”